Wednesday, December 2, 2009

INTERVIEW-Pakistan's Karachi the Taliban revenue engine - mayor

KARACHI, Dec 2 (Reuters) - Pakistan's biggest city and commercial hub of Karachi is the revenue engine of the Taliban who pose a threat to the U.S. military operation in Afghanistan from city no-go areas, Karachi's mayor said on Wednesday.

The city of 18 million people generates 68 percent of the government revenue and 25 percent of Pakistan's gross domestic product but it is vulnerable to both militant attacks and political violence, said mayor Syed Mustafa Kamal.

"As Karachi is the revenue engine for Pakistan, it's the same revenue engine for the Taliban," Kamal told Reuters in an interview in his office.

While investors in Pakistan's stock market are getting used to almost daily violence in northwestern parts of the country, violence in Karachi would have an immediate impact on financial markets, dealers say.

Karachi has been largely free of militant attacks over the past two years which Kamal put down to his party's strong and popular stand against militancy combined with effective security operations.

Eight militant gangs had been rounded up in the city over recent months, including one planning to attack an oil storage depot next to the country's main port in the city, he said.

"Half of Karachi would have burned," said Kamal, referring to the foiled depot attack. [ID:nISL83142]

A dynamic 37-year-old, Kamal has won support with his efforts to ease traffic gridlock and improve woeful services.

Kamal said a large proportion of supplies bound for U.S.-led forces in landlocked Afghanistan arrive at Karachi's port, which he said was still vulnerable to an attack that could cripple the U.S. war effort.

"If they don't get their water supply through this route the next day they'll be drinking Afghan water and the next day half the army will have stomach problems," he said.

"THAT'S ABNORMAL"

The city, which has long suffered a reputation for political violence and crime, still had no-go areas where the authorities including the police dared not venture, he said.

"These no-go areas give room for any terrorist, no matter how small or big, to come and stay," said Kamal, though he said he did not believe press reports that Afghan Taliban leader Mullah Mohammad Omar was hiding in the city.

But he said militants were financing their war in the northwest of the country and in Afghanistan through kidnapping and drug trafficking through Karachi.

"People are being kidnapped here in Karachi and the ransom is taken in Waziristan," he said, referring to a northwestern ethnic Pashtun region where the army has been battling militants since October.

Four hundred million rupees ($4.8 million) had recently been sent from one Karachi bank branch to various parts of the northwest in one month, he said.

"That's abnormal," he said. "For sure, the biggest chunk of Taliban war ... resources are going from Karachi." Kamal is a member of the Muttahida Qaumi Movement (MQM), which represents mohajirs, the descendents of Urdu-speaking people who migrated from India after the creation of Pakistan in 1947.

They are the biggest community in Karachi and dominate its administration.

The MQM, now an uneasy member of the federal coalition government, was heavily involved in bloody factional battles in Karachi in the 1990s.

Kamal said Karachi remains volatile and vulnerable to factional violence: "It would just take a single statement to burn the whole city."

But he said the MQM had a new mentality and maturity.

"We understand very well that Karachi is the backbone of Pakistan's economy," he said. "If something, God forbid, happens the MQM would be the biggest loser.

"I don't have a house in Peshawar or Lahore, nor can I go to New Delhi again ... My graveyard is here." (For more Pakistan stories, click [ID:nAFPAK]; For a factbox on Karachi, click on [ID:nISL407920] (For more Reuters coverage of Afghanistan and Pakistan, see: here)